KARACHI: Khalid Siraj Textile Mills Ltd (KSTML) said on Monday it’s shutting down operations until May 31 owing to political unrest, import restrictions and an “unchecked” increase in the dollar rate.

“These factors have increased inflation, undermined the rupee, driven up cotton prices, driven up the cost of electricity per unit and, most importantly, harmed business confidence,” it said.

The textile maker has joined a steadily growing number of firms that’ve shut their plants because the country has run out of dollars to pay for the import of industrial raw materials.

Dozens of listed firms, especially in the textile and auto sectors, have faced supply-chain disruptions in recent months. The government has failed to revive the International Monetary Fund (IMF) loan programme for months on end. The Washington-based lender has withheld fresh disbursements on account of Islamabad’s failure to fulfil the loan’s preconditions. The delay in the staff-level agreement with the IMF has also postponed the inflow of dollars from friendly countries, further deepening the foreign exchange crisis.

Meanwhile, shareholders of Reliance Cotton Spinning Mills Ltd approved a resolution in an extraordinary general meeting on Monday allowing an equity investment of up to Rs1 billion in Sapphire Fibres Ltd, an associated firm, at the going rate on the stock exchange.

The announcement resulted in the share price of Sapphire Fibres Ltd rising 3.9 per cent to Rs1,067.37 over the preceding close.

Associated companies, including Reliance Cotton Spinning Mills Ltd, already control almost 52pc

shareholding in Sapphire Fibres Ltd. The general public owns a little over one-fourth of the total shareholding in the textile maker.

Separately, Synthetic Products Enterprises Ltd (SPEL) made a public announcement on Monday to start buying back up to 9.98 million of its shares from the stock market at the going rate March 31 onwards.

The size of the transaction should hover around Rs114.7m at the prevailing share price of Rs11.49 apiece. The targeted volume constitutes 5pc of the plastic maker’s total outstanding shares.

Many listed companies have carried out share repurchase exercises in the ready market in the recent past. According to buyback data compiled by Arif Habib Ltd, companies that have completed their share repurchase exercises since May 2022 are Maple Leaf Cement Factory Ltd, Netsol Technologies Ltd, JDW Sugar Mills Ltd, Bank Alfalah Ltd and Lucky Cement Ltd. Companies that have either started or only announced their buybacks include Engro Corporation Ltd, Kohat Cement Company Ltd and Kohinoor Textile Mills Ltd.

SPEL will keep repurchasing the stocks until September 20 or the date when the targeted volume is achieved. After the buyback exercise, the company’s free float — shares that’re available for the public to buy and sell — will have gone down from 25pc to 20pc.

Meanwhile, Packages Ltd said on Monday its consolidated net income for 2022 amounted to Rs6.9bn, down 2.38pc from a year ago.

The company also announced a cash dividend for ordinary shareholders at Rs27.50 apiece.

Published in Dawn, March 28th, 2023

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